Question: In marginal costing, which of the following costs is included in product costs?
Options:
Fixed manufacturing overhead
Variable manufacturing overhead
Selling and administrative expenses
All of the above
Correct Answer: Variable manufacturing overhead
Solution:
In marginal costing, only variable manufacturing costs are included in product costs.
In marginal costing, which of the following costs is included in product costs?
Practice Questions
Q1
In marginal costing, which of the following costs is included in product costs?
Fixed manufacturing overhead
Variable manufacturing overhead
Selling and administrative expenses
All of the above
Questions & Step-by-Step Solutions
In marginal costing, which of the following costs is included in product costs?
Step 1: Understand what marginal costing is. It is a costing method that only considers variable costs for product costing.
Step 2: Identify what variable manufacturing costs are. These are costs that change with the level of production, such as raw materials and direct labor.
Step 3: Recognize that fixed costs, like rent and salaries, are not included in product costs under marginal costing.
Step 4: Conclude that in marginal costing, only variable manufacturing costs are included in product costs.
Marginal Costing – A costing method that includes only variable costs in product costs, excluding fixed costs.
Product Costs – Costs that are directly associated with the production of goods, which in marginal costing includes only variable manufacturing costs.
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